The golden arches of McDonald’s symbolize one of the greatest success stories in the history of franchising, and the quick-service restaurant category it spawned has grown to become a $170 billion business worldwide.
For a time, the fast food industry and its first cousin, the casual dining industry, seemed boundless, routinely clocking 14 percent growth per year. But this is the best of times and the worst of times for fast food restaurants as well as the broader franchised restaurant industry.
The problems are two-fold: One is economic, related in part to the recession and in part to an overexpansion of fast food and casual dining segments when the economy was good. The second, far more ominous problem, is political.
As the debate over health care reform heats up on Capitol Hill, the fast food industry has come under increasing scrutiny for its role in the health care crisis. The battle is not new. Consumer advocates and nutritionists have been waging a war against fat- and calorie-laden burgers and French fries for more than a decade.
For the most part, the industry has been able to contain the conflagration. When the industry was hit by a rash of class action “obesity lawsuits” in the earlier part of this decade, the Republican Congress quickly generated a bill banning the legal actions, which actually passed in the House.
Most of the lawsuits were settled out of court, and the industry paid lip-service to critics by offering a few healthier menu choices, such as salads and apple slices. But the emphasis remains on food packed with fat and salt.
Meanwhile, industry-friendly Bush administration regulators didn’t lift a finger while obesity and diabetes rates soared — especially among children — and the nation consumed an avalanche of 1,200-calorie burgers. One burger alone contains almost the full daily allowance of fat and salt.
But the health care debate, Democratic control of Congress and the arrival of Barack Obama in Washington have turned the tables on the industry. Lawmakers are seriously discussing taxes on unhealthy fast food and soda, restrictions on fast food advertising, and even a ban on fast food restaurants near schools.
To make matters worse, the Obama Federal Trade Commission is gearing up for another study of fast-food industry marketing to children. This month, the FTC asked for public input on the study’s parameters. The results will almost surely lay the groundwork for new legislation.
The debate seemed to hit a watershed two weeks ago, when The New York Times published a blistering attack on the industry by long-time critic Michael Pollan, a contributing writer for The New York Times Magazine and a professor of journalism at the University of California, Berkeley.
“One of the leading products of the American food industry has become patients for the American health care industry,” he acidly charged. He noted that the nation is spending $263 billion a year to treat obesity and diabetes and “hundreds of billions more” on cardiovascular disease and cancers linked to diet.